Automotive News - May 26, 2008 - (Page 53)

MAY 26, 2008 • 53 Toyota plans credit card LOS ANGELES — Toyota Financial Services is jumping into the consumer credit market with a Toyota-branded credit card. The card will let consumers accrue points through purchases. Those points can be redeemed for discounts on vehicle purchases or for parts and maintenance. Toyota has issued about 50,000 Lexus-branded credit cards since 2005. About 21,000 customers have redeemed points, 95 percent of which went toward vehicle maintenance and 5 percent toward the purchase of a new Lexus. plants through July 16. International Truck and Engine Corp. idled production at its diesel engine plant in Indianapolis on Friday, May 23, a company spokesman said. The plant already had been scheduled to close for maintenance during the first two weeks of July, the spokesman said. International supplies Ford’s Kentucky Truck plant in Louisville, which makes F-series Super Duty pickup trucks. Mulally: Full speed toward smaller Amy Wilson awilson@crain.com news ANALYSIS The 2009 Honda Pilot: Now on sale Honda Pilot starts at $28,230 LOS ANGELES — The redesigned 2009 Honda Pilot went on sale last week with sticker prices starting at $28,230. The Touring model, the most expensive version, is priced at $40,590 and comes with four-wheel drive, a navigation system and a rear entertainment package. Prices include shipping. Sanfilippo switches agencies DETROIT — Jim Sanfilippo, formerly chief marketing officer for WPP Group’s Team Detroit, Ford Motor Co.’s advertising agency, is the new COO of World Marketing Group in Irvine, Calif. The company handles promotion, media planning, buying and research and other activities for Hyundai Motor Co. and Kia Motors Corp. Sanfilippo ran Hyundai’s first ad agency in the late 1980s and was Kia’s vice president of marketing. Plastech plans assets auction DETROIT — Troubled auto supplier Plastech Engineered Products Inc. plans to hold an auction for its business units and other assets June 16. Plastech has been soliciting offers from potential buyers of its exteriors, stamping, carpet, interiors and underhood business units, as well as miscellaneous assets, according to Bankruptcy Court documents. International idles plant DETROIT — A production shutdown at Ford Motor Co.’s truck plant in Louisville, Ky., caused an engine supplier to close one of its DETROIT — Ford Motor Co. is getting religion about American consumers’ lack of appetite for trucks. Ford CEO Alan Mulally now believes U.S. truck sales are in rapid and permanent decline. That means small and mid-sized vehicles — both cars and crossovers — ultimately will dominate the U.S. industry and Mulally: “You just Ford’s lineup. Last week’s sweeping cannot make cars production cuts torpedoed the au- that people don’t tomaker’s long-promised plan to re- want.” turn to profitability in 2009. “It appears to us that fuel prices are not going to come down,” Mulally said last Thursday. “You just cannot make cars that people don’t want.” The pullback came just four weeks after Ford announced a surprise $100 million first-quarter profit amid glowing media reports about the automaker’s turnaround. But Ford soon found that consumers wanted dramatically fewer pickup trucks and SUVs as gasoline prices topped $3.50 a gallon (see box, right). With customers turning away from the gas guzzlers, Ford is slashing production by 15 percent in the second quarter. Third-quarter production will plunge as much as 20 percent compared with 2007. Fourth-quarter production will drop as much as 8 percent. Pickup and SUV plants are taking the brunt of the cuts. Indeed, the percentage of pickups and SUVs in Ford’s 2008 production plan will be the lowest the company has seen since at least the 1980s when the original Taurus was hot, Ford sales analyst George Pipas told Automotive News. Give Mulally credit for being the first from the Detroit 3 to step up and say loudly that the typical Detroit pattern is a path to oblivion. Ford also stepped away from the pack with a new sales forecast of U.S. light-vehicle sales of 14.7 million to 15.1 million units in 2008. That is one of the lowest projections in the industry. But don’t drown Ford with applause. The situation remains dire: Ford can’t predict when it might make money, Mulally Lowballing it Ford’s new 2008 light vehicle sales forecast is among the lowest in the industry. Here’s a selection. Ford Motor Co. 14.7 million-15.1 million J.D. Power 14.9 million IRN Inc. 15.0 million Global Insight 14.8 million General Motors 15.2 million-15.5 million Chrysler 15.0 million-15.5 million Toyota Low 15 million range Nissan 15.2 million Honda More than 15.0 million Hyundai 15.0 million or fewer Seismic shift Ford says the rapid decline of pickup and SUV sales will make it miss its profit forecast. Here are those vehicles’ share of the U.S. retail vehicle market for 2007, last month and this month. 2007 APRIL MAY* Pickups SUVs 14.1% 8.4% 11.0% 5.2% 9.0% 4.4% *First two weeks of May Source: Ford Motor Co. said. He promised more guidance in late July after further number crunching. More job cuts are planned by Aug. 1. Reductions will affect both hourly and salaried workers, and executives don’t rule out firings and additional plant closings. J.P. Morgan analyst Himanshu Patel estimates Ford could lay off as many as 9,000 additional employees. The small and mid-sized vehicles Mulally is counting on to rebalance Ford’s product lineup aren’t scheduled to arrive in the U.S. market until 2010 and later. c stock watch Manufacturers BMW-ADR Fiat S.p.A.-ADR Ford General Motors Honda-ADR Hyundai-ADR Nissan-ADR PSA-ADR Renault-ADR Suzuki-ADR Toyota-ADR Volkswagen-ADR Closing price May 23 Closing price May 16 Weekly percent change 52-week high 52-week low FORD Big production cuts are aimed at building Honda-size lineup continued from Page 1 Neck and neck Through April, the Honda brand is ahead of the Ford brand in retail sales. BRAND JAN.–APRIL ’08 $56.00 25.50 6.85 17.50 31.99 16.80 17.16 65.15 102.75 25.85 99.01 57.95 $57.25 25.50 8.11 20.68 33.19 16.80 18.71 69.90 108.00 25.07 101.87 60.30 –2.2% – –15.5 –15.4 –3.6 – –8.3 –6.8 –4.9 3.1 –2.8 –3.9 $68.80 34.85 9.70 43.20 37.80 23.16 23.75 92.50 165.75 33.25 128.33 60.60 $48.60 14.15 4.95 17.47 27.01 4.90 15.88 65.15 98.10 23.60 91.21 28.55 Honda Ford 437,102 421,000 compared with Honda’s 437,102. But Honda has sales momentum, while Ford is in turnaround mode. Source: R.L. Polk, and April retail sales estimate by Ford Hot-selling cars With hot sellers like the tiny Fit, the Civic Hybrid and a redesigned Accord, Honda brand total sales through April are up 3.6 percent, while overall industry sales are down 9.2 percent. Honda avoided a sales slump in part because it doesn’t sell gas-guzzling pickups and big SUVs, says Lonnie Miller, an analyst for R.L. Polk & Co., of suburban Detroit. “Honda is sitting pretty right now with the Fit, Civic Hybrid and redesigned CR-V,” Miller said. Polk’s retail vehicle registration data for the first three months of the year — the most recent period available — supports Ford’s retail sales estimates. Through March, the Honda brand generated 306,261 retail sales, according to Polk data. The Ford brand generated 307,550 retail units, and Chevrolet had 336,056. If trends continue, the Honda brand may move up to No. 2 as early as this year. Concludes Miller: “Chevrolet should worry.” Ford aims for a rebound as it introduces several vehicles. Retail Groups Closing price May 23 Closing price May 16 Weekly percent change 52-week high 52-week low Asbury Automotive Group $16.25 AutoNation 15.52 Group 1 Automotive 26.89 CarMax 19.54 Lithia Motors 7.35 Penske Auto Group 20.56 Sonic Automotive 18.37 $17.34 16.46 28.90 21.19 8.34 21.04 19.28 –6.3% –5.7 –7.0 –7.8 –11.9 –2.3 –4.7 $27.70 22.86 43.23 27.42 27.58 22.92 31.88 $11.71 11.72 19.81 15.81 7.35 13.57 15.82 Suppliers Biggest weekly swings from among the Automotive News top 150 suppliers to North America whose stocks are traded in the United States Closing price May 23 Closing price May 16 Weekly percent change 52-week high 52-week low Ford plans to sell the Flex crossover this summer. If the Flex catches on, it could add 40,000 units to Ford’s total this year. Ford hopes to sell as many as 100,000 Flexes annually. A revamped F-150 pickup is scheduled to arrive at dealerships in the fall, but Ford likely won’t see any increase in sales because of high fuel prices. The F-150 could help slow Ford’s dramatic decline in pickup sales, which are down 15 percent this year. But Ford’s turnaround will remain a work in progress, if production plans are any indication. In the second quarter, Ford’s overall production will decline 15 percent from the same period a year earlier. Overall production will drop as much as 20 percent in the third quarter and 8 percent in the fourth quarter. Honda, for its part, will bring out a new version of the Fit in the fall. The rest of its lineup has been revamped. Honda spokesman Chuck Schifsky downplays the retail sales race with Ford and Chevrolet. If Honda is ahead of its rivals at year end, you won’t see champagne corks popping. Says Schifsky: “It’ll be business as usual.”c Winners Eaton Corp. Losers American Axle Visteon Corp. Goodyear Tire & Rubber Lear Corp. Cooper Tire & Rubber $88.49 $18.37 4.05 25.29 27.10 11.37 $88.43 $22.55 4.75 28.98 30.88 12.71 0.1% $104.12 –18.5% –14.7 –12.7 –12.2 –10.5 $31.00 8.74 36.90 41.33 28.50 $66.27 $15.73 3.02 22.27 20.00 11.37 Other trends from the Polk retail sales data Some other retail sales trends from the Polk data: Korean automakers Hyundai and Kia are having a tough year. Hyundai’s retail sales are off 11.5 percent, while Kia’s are down 15.7 percent. Despite having no diesels in its lineup, Volkswagen’s retail sales are up 3.8 percent. VW’s sales could improve further this fall when the new version of the Jetta TDi diesel debuts. Last week, the car earned an EPA rating of 41 mpg on the highway. The Nissan brand is one of

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Automotive News - May 26, 2008 Bad times? Not for CEO paychecks GM seeks Volt tax break to avoid $40k sticker Ford's big cuts aim for a Honda-sized lineup Automotive News gets new marketing communications director Toyota pushes N.A. suppliers to match offshore prices VW predicts 5% U.S. sales gain Toyota plans 3 plants for hybrid batteries GM's American Axle strike tab: $2.82 billion Lawsuit in Florida targets congressman's dealership Orbiting the blogosphere Kia to build small cars in U.S. plant VW Mexico exec will run North American purchasing Fiat mulls 500 minicar for U.S. GM scraps big rwd sedans for Chevrolet and Buick Hyundai spends like never before to launch Genesis luxury sedan Surprise: Suzuki slides as fuel prices rise GM paid Walter Chrysler a whopping $600,000 a year Chrysler sends mystery shoppers to dealerships Toyota owes royalties on some hybrids GM, American Axle to resume output Ford predicts bigger demand for smaller engines in Escape This is Volvo? Ads sell chic, not just safety An overnight success in 50 years Obama's comments were out of line Japan does it; why shouldn't we? 25% is high, but Chrysler is wise to revisit SCORE Safety efforts must focus on the driver Blame the dealer for poor service Don't judge Ford quality by just one car Ford quality is best in many years Mitsubishi considers piggybacking with Caterpillar suppliers to cut costs Nissan to make lithium ion batteries 'Boss Ket,' Connery inspire Tim Jackson Germany leads rise in Europe sales Court: Buyers must act in good faith to win lemon law damages Nissan wants suppliers to reduce utility bills Bajaj: From scooters to autos The next $2,500 car? Infiniti will look different, add engine power in Europe Lamborghini boss wants to keep the big engines Lamborghini ups ante in 'entry' supercars Continental exec: We're done selling VDO assets Honda plans Fit hybrid Outgoing Visteon CEO to receive $2.5 million Audi production chief: Cooperation with Porsche will grow Picture this RV shipments fall in March M-B will buy Chrysler studio Supplier personnel VW expects to reap big share of U.S. diesel market Valeo CEO Morin: Pass rising costs to consumers Suppliers to the 2008 Nissan Altima Dealers Auction workshops demystify Web buying April used-vehicle prices: Light trucks fall and cars rise Volvo certified plan offers free satellite radio Mulally: Full speed toward smaller Toyota plans credit card Sanfilippo switches agencies International idles plant Honda Pilot starts at $28,230 Plastech plans assets auction What counts GM's 2-pronged strategy for Calif. rules: If you can't beat 'em . . . meet 'em New wheels for the cop shop The cost of luxury? For Hyundai, it would have been $2.5 billion New tools allow early design input from consumers Lexus in the sky with carbon: How ex-Beatle's PR effort tanked Buy an '08 . . . get a .44 $4 gasoline gives new cachet to aging econo-beaters Time tips its hat to Tata Car marketers: Magazines must widen ad reach Automakers seek 'one-to-one' approach to magazine ads Auto ads go to the movies Here's the next big thing: Ads tailored to you GMC courts women with Acadia

Automotive News - May 26, 2008

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